Forecast December 2018

Focus Colorado presents forecasts for the economy and state government revenue through FY 2020-21. Implications of the forecast for the state's General Fund budget and spending limit are described in the report's highlights and executive summary sections. The report is based on current law, legislation passed by the General Assembly affecting the forecast is described throughout the report.

Focus Colorado Sections:

An overview of what the revenue forecast means for the General Fund budget, transfers to the State Education Fund, Senate Bill 09-228 transfers to capital construction and transportation, and tax policies available only when there is a certain level of growth in General Fund revenue.

This section presents information on the outlook for school finance from a state budgetary perspective, both in the current (FY 2018-19) and subsequent (FY 2019-20) fiscal years. This outlook incorporates information from the K-12 enrollment and assessed value projections, located on page 37 and page 45, respectively, of the forecast document. Enrollment changes are a major determinant of overall required formula funding (total program), since funding is allocated on a per pupil basis. Similarly, assessed values on real property determine a school district’s property tax base, which, along with a school district’s total program mill levy, determine a school district’s available property tax revenue.

Article X, Section 20 of the Colorado Constitution (TABOR) limits the annual state revenue the state may retain and either spend or save. This section presents the outlook for revenue subject to TABOR, the TABOR limit, and TABOR refunds. In addition, this section describes the mechanisms used to refund revenue in excess of the TABOR limit.

Cash funds are separate from the state General Fund. Cash funds receive revenue from a specific fee or tax that are set aside to be used for a specific purpose. Major cash fund revenue forecasts include:

This section of the forecast presents projections for kindergarten through twelfth grade (K-12) enrollment in Colorado’s public schools. Projections are presented in full-time equivalent (FTE) terms, and are an important factor in determining funding levels for Colorado’s 178 school districts. Table 15 summarizes current and projected enrollment for the 2018-19 through 2020-21 school years by forecast region. Figures 10 and 11 on pages 42 and 43 show enrollment growth projections by forecast region and school district, respectively, for the 2019-20 school year.

This section provides projections of assessed values for residential and nonresidential property in Colorado and the residential assessment rate through 2021. Assessed values are an important factor in determining property taxes, which are the largest source of local government tax revenue in Colorado. Counties, cities, and special districts all receive property tax revenue. Local property tax revenue is also the first source of funding for local public school districts. Assessed property values within a school district are thus an important determinant of the amount of state aid provided to each school district. Districts then receive state equalization payments in an amount equal to the difference between formula funding and their local share. More information on school finance can be found starting on page 37.

This section presents forecasts of the state’s adult prison population and parole caseload for FY 2018‑19 through FY 2020‑21. The section includes a discussion of the historical and current trends affecting these populations, the adjustments made since the December 2017 forecast, and relevant recent legislation. It concludes with an analysis of risks to the forecast.

This section presents the forecast for the population of juvenile offenders administered by the Division of Youth Services (DYS) in the Department of Human Services. The three major populations administered by the DYS are juveniles committed to custody, juveniles sentenced to a detention facility, and juveniles serving a period of parole.

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